Why institutionally aligned practices sell for big bucks
By | 20/11/2012 8:00:00 AM | 0 comments
Are you wondering what your practice is worth? When it comes to getting the best price upon selling, there are serious advantages to being institutionally aligned.
This is the assessment of Hunts’ Group principal Anthony Hunt, who has offered his top selling tips to Wealth Professional TV.
“There is still an opportunity to get a premium multiple, provided you can demonstrate the quality of the business and find the right buyer who can say ‘I’m comfortable with the quality of this business and paying a higher multiple for it’,” he said.
“And also if there’s a strategic premium to me as a buyer; so if you’ve got that institutional alignment with their product set, and you know that they’re going to get some value out of the product set that your customer base has”.
Mike Stewart from Radar Results agreed, noting that – while it’s nice to be able to offer clients a choice of 20 or 30 platforms and 13 different insurance products – this structure can create difficulties when the time comes to sell.
“If you’ve got someone who wanted to buy something that’s all on one particular platform, or two particular platforms, that’s easy for transition; that’s easy for management,” he said, adding that a multiple platform and product system can be very difficult to value.
“Number one, you’ve got to chase all that data through. And generally in the transition it’s quite difficult,” he said.
Click here to view the full video and discover more vital valuation and selling tips.
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